ICT is important for any modern economy. But it is essential for Northern Ireland because it is a growth sector — and we don’t have many of those.
It also offers much more value to the wider economy than most other market places.
A spokeswoman for Invest NI explains: “ICT remains a priority sector for Invest NI because of the significant contribution it makes to the local economy in terms of quality employment, above-average salaries and skills development. Northern Ireland has an established and sophisticated IT industry comprising a range of highly successful and innovative companies, both indigenous and internationally owned. More than 15,000 people are employed across 900 companies and there are 13 university-related ICT research centres.
“Investors continue to be attracted to Northern Ireland, primarily because of the research base and skills availability — there are approximately 1,000 graduates annually in ICT and related subjects. Invest NI works closely with the Department for Employment and Learning to promote careers in the sector and ensure that the skills base remains relevant to investor needs. In 2009/10 Invest NI made 19 offers of support totalling £29m to internationally owned ICT companies, securing investment commitments of £126m and plans to create 1,068 new jobs.In addition, a further 35 offers totalling £3m were made in relation to innovation-related ICT projects securing investment commitments of £10m.”
Invest NI’s pitch to overseas investors is that Northern Ireland is one of the most cost-efficient business locations in Europe for the sector, with costs 38% below the European average. Several of the major companies with IT operations in Northern Ireland provide services to support headquarters elsewhere. This can save 50% on London costs and 35% on US costs, says Invest NI.
In addition, Northern Ireland now benefits from rapidly improving communications infrastructure. Project Kelvin is delivering a transatlantic cable straight into a telehouse in Derry. And Northern Ireland will be the first UK region to benefit from a completed BT 21CN network upgrade — a next-generation network offering a fully enabled IP infrastructure, high speed, and secure and versatile communications network.
Michael Noble, skills manager at Momentum, the body that represents the ICT sector in Northern Ireland, says that more people in Northern Ireland need to recognise the benefits from the industry and the reality that it offers very attractive careers.
“One of the strengths is that we are still in growth,” argues Noble. “We have a very well established worldwide reputation for providing good IT and computing solutions. We have companies like Citi, AllState and Lagan that are doing work on a global stage.
“But we need to work hard. Our raw material is the skills and knowledge of the people in the industry. We need to get young people through the education sector to keep that growth going. It can be hard work to persuade students to concentrate on ICT. There are a lot of barriers, with perceptions that jobs in the sector are insecure and low-paid — which is not true.”
While the sector has established itself as a base for research and development and for operating support systems, the tax rate holds us back from more ambitious objectives, says Noble. “A big element is the corporation tax rate in the South,” he says. “So we have not been able to attract the big players like Microsoft and Google. We have been able to attract the software engineers — the bits of the company that are located here, but which do not make a profit per se. They are creating value for their [group] operations. So the corporation tax rate is not important to them. What is important is the experience of the people.”
Noble would be happier, though, if Northern Ireland were producing more graduates with ICT skills. “That is the pressure point at the moment,” he says. It is also a reason that Momentum is partnering the Department for Employment and Learning, e-skills UK and Invest NI in the BringITOn campaign to increase the supply of ICT specialists.
A similar argument is put forward by Padraig Canavan, chief executive of the Singularity software solutions company. Singularity is headquartered in Derry, where it employs 80 staff, with a further 40 workers in Belfast and other operations in Hyderabad, New York and Singapore, but he is frustrated at the lack of suitable graduates — especially outside Belfast. Yet he maintains that Northern Ireland’s ICT strength is in its skill base. “It’s all down to the education system,” he says. “The quality of the software engineering graduates attracts companies to set-up here. What really attracts them is the universities, though there is not enough higher education facilities here [in Derry]. Investors know that higher education institutions here will react to produce the graduates they need.”
Gerry Kindlon is heading-up Londonderry Chamber of Commerce’s Digital Derry initiative and he is also a director of one of largest ICT companies operating in Northern Ireland. He says the restraint is not so much the total supply of graduates with ICT skills, but rather the lack of specific skills in what should be target niche markets. “You can take the sum total of ICT graduates and say we are well served,” he says. “But in niche areas there definitely is not enough. In Derry, with graphic designers and so on, we are really struggling to get these skills. There are very specific niche skills in particular areas around creative digital content where there are not enough skills. And that is the fastest growing part of the sector. And also there are not great skills in mobile computing, which is again a fast-growing part of ICT.”
This is a frustration for Kindlon as he heads up efforts to make the North West a major hub for the digital creative industries. “We want to be the best place on this island to open a digital creative business by 2015,” he says. As part of this, Kindlon and his colleagues have objectives to generate a significant number of new digital businesses in the city, including 20 by the end of 2012.
Belfast has already established itself as an important global sector for ICT. Other parts of Northern Ireland now want to copy its success.